Bank of America: Own Financials, Avoid Basic Materials

BofA's top equity and quant strategist reveals what earnings projections and corporate guidance are telling her.

We've had another quarter of weak earnings growth and low expectations. Similar to last quarter, bottom-up consensus expectations for S&P 500 2Q EPS have continued to decline going into earnings season.

Analysts expect EPS of $26.64, now slightly below our forecast of $26.75. This represents earnings growth of 1.4% YoY (-1.6% ex. Financials), following last quarter's 3% YoY growth (flat ex. Financials). Results from the 22 early reporters have been mixed, with the top- and bottom-line beat by Lennar highlighting the...